Doctors find that one aspirin per day reduces the risk of heart attacks. Demand for aspirin will
A) increase, so that equilibrium price and equilibrium quantity will increase.
B) decrease, so that equilibrium price and equilibrium quantity will increase.
C) increase, so that equilibrium price will decrease and equilibrium quantity will increase.
D) increase, but the new equilibrium price and quantity are indeterminate.
A
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Which types of firms have limited liability?
A) corporations B) corporations and partnerships C) partnerships D) proprietorships
Why are externalities called market failures? Are pecuniary externalities also an example of market failure?
What will be an ideal response?
The accumulation of international debt increased the debt service requirements of the indebted countries. After the debt crisis began, this caused
A) the adoption of expansionary policies to return to growth. B) large capital inflows to service the debt. C) the adoption of strongly contractionary policies to reduce consumption and government deficits. D) an intensification of industrial policies targeted on import substitutes. E) a reduction in inequality.
Expansionary monetary policy should be used if:
A) aggregate demand-aggregate supply equilibrium is below potential output. B) aggregate demand-aggregate supply equilibrium is above potential output. C) aggregate demand-aggregate supply equilibrium is equal to potential output. D) none of the above.